The Indian rupee witnessed its steepest decline on Friday, breaching the 94 level against the US dollar for the first time.
The ongoing war with Iran has severely disrupted global exchange rates and payment systems dominated by the US dollar. Supply chain disruptions and rising demand have placed immense pressure on oil-importing nations, particularly in Asia.
On Friday, the rupee fell to 94.15 against the dollar, shattering the previous all-time low of 93.98 hit earlier this week. The currency has depreciated by nearly 3.5 per cent since the start of the conflict in Iran over a month ago.
The continuous slide has raised concerns in domestic markets, especially in the energy sector, where the government has been forced to announce price hikes on essential fuels along with curtailment measures.
Meanwhile, tensions in West Asia have pushed oil prices back above $100 per barrel after a brief drop to $95.
The strengthening US dollar has also exerted downward pressure on gold and silver prices, which are expected to fall further in the coming days.
Experts warn that sustained high energy costs and inflation — driven by high consumption and limited supply — could dent India’s overall GDP growth if the escalations in the Middle East continue for several more months.
Others believe that even if the conflict de-escalates, the rupee could still slide to 98 per dollar later this year.
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